CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Fri Jun 14, 2019 6:50 pm

edealinfo wrote:
VTORD wrote:
CaliguyNYC wrote:
I am trying to analyze why the minister would say Jet will be saved and this process never dies.

Read the Economic Times article again. The headline is misleading when you read the text. Here is the relevant quote section:

India's new civil aviation minister said on Friday he is confident that airline capacity shortage problems following the grounding of Jet Airways Ltd will be solved, in the government's first comments about the issue since it was re-elected last month.
We are "very confident we can solve that problem," Hardeep Singh Puri said on the sidelines of a conference in New Delhi


Nowhere does it say or even mean "Jet will be saved" explicitly.


Great job with the emphasis. This pretty much sums it up — Jet is dead.


I agree Jet is dead. All the current chatter with EY and the banks is just a game or for show. What ever it is meaningless. Jet will be shut down. They should not have delayed the Indian version of bankruptcy. So weird that they did (but once agin politics even influenced a bankruptcy court from moving forward.
 
aarbee
Posts: 406
Joined: Thu Aug 25, 2005 3:20 am

Re: Jet Airways: Shutdown

Fri Jun 14, 2019 8:34 pm

CaliguyNYC wrote:
aarbee wrote:
dtw2hyd wrote:

The current government will never indemnify any investor.

Which capitalist market or govt will compensate an investor? Care to point out?

dtw2hyd wrote:
They extensively use so-called autonomous agencies to arm-twist businesses. Dusting off cold cases or filing new cases without statutory limits is a common practice. Case on Tony Fernandez is one such example. DGCA, GTF investigation is another.

If it is true, I think it's not fair. But
1) Is this the only government in Indian history which might have done it?
2) Should the current government not investigate anything? Or just do what fancies you?
dtw2hyd wrote:

Also, the revival of Jet will hurt Ajit Singh more than anyone else. Not going to happen.

More conspiracy theories just because you are devastated that the Indian electorate choose not follow your direction.

If you want to constantly bring in your utter dislike for the current govt., it's leader, the community he is from, etc. on this thread ... better look into Indian Politics Mega thread in Non-Aviation.


Aarbee - the indemnity is about coming after the new owners for potential wrong doings of NG. That is totally normal. In the US you wouldn't need the govt to indemnify you because the laws give you work arounds (to a point). Hindujas clearly feel that Indian laws do not protect them, so they are asking the govt for indemnity.

Ok. So it is about liability issue. Even so, why should the govt. do it. It will create a seriously bad precedence. Somebody will start company, loot investors, give up, brother comes in as new investor without liablity, and the circle will go on.

CaliguyNYC wrote:
Can I ask why you get so passionate if people are not happy with the way things are handled re Jet? It is just their opinion. None of us work for an airline (that we know of - not counting the intern). Maybe one or two of us have admitted to being aviation consultants. But why are all the posts so aggressive against people. If you disagree with them, either correct them or ignore them. Look there seem to be two camps here (1) Those that lament Jet's closing and who cannot understand why Indian laws / banking rules don't allow the pieces of Jet to be sold to another owner and (2) those that feel Jet should die where die doesn't mean their current investors getting nothing it is where die means all the spoils of Jet should be given away. Both sides seem to agree the NG was a bad manager and deserves to be out.

I'm in neither camp. I have being silent for the longest time and more content with getting updates in civil aviation, Indian CA, 9Ws blow up, in that order. It's absolutely fine to discuss opinions. Let the GOI check if there is some connection between long time UK residents (Hindujas and Goyals)

What I see is 2 sets of people (person) who are in your camp 1
1) Who want to promote their political agenda in Civil Aviation and using 9W issues as a tool
2) Who are extremely upset about 9Ws implosion and using anything and everything including : politics, having NO basic minimum understanding of India and unnecessarily berating India (I'm NOT at all of the opinion that it is above criticism), comparing to NK, throwing a fit because NG was off loaded, showing the maturity of a 3rd grader by continuously misspelling Indian PMs name to bring politics in here, accusing of hatred, making fun of looks of civil aviation, I know better than EXIM bank, etc. etc. (List is endles)

So just because I argue against that doesn't make me of camp 2. I don't despise NG. NG at the end of the day was instrumental in changing the face of Indian .
aviation. Too bad his ego and at the end played his hand so bad that it's impact was not only on passengers also to their loyal employees.

CaliguyNYC wrote:
So if you agree with the above, then what is there to get so emotional. I would have been happy if say Vistara would have bought Jet's BOM opperations. The banks would have made money and Vistara would have been up and running with a nice hub. But yet I am a Jet lover. On other threads people would not describe my opinion as a lover of the failed airline. In the Jet case we have the added option of just giving away a lot of the value of Jet. Most situations with other airline failures don't have this option. So in reality no one here is a Jet lover. It is really between maintain a BOM hub airline vs destroy it.


I love aviation and happy to see the progress of Indian aviation. But, as I said in the Indian aviation thread, thats where we differ. Since you are BOM centric (don't consider this as a personal attack) your thoughts, opinions and preferences are BOM/9W centric, which is completely fair. But at the same time the growth and state of Indian aviation is not just BOM/9W. The fact that:
  • There are direct flights Indore-Nagpur, Bengalaru-Udaipur.
  • Guwhati people have 2 options to travel to Jaipur and in under 5 hours.
  • Amritsar and Goa has direct connections to Doha and beyond
  • Lucknow residents can travel to Bangkok.
without going to BOM and not using 9W shows me the progressive state of Indian aviation.

Vistara can originally and efficiently grow based on their two promoters, without changing their business plan because of 9W demise.

Indian aviation can survive without BOM hub and it's former hub airline.
Love the AIXes
 
aarbee
Posts: 406
Joined: Thu Aug 25, 2005 3:20 am

Re: Jet Airways: Shutdown

Fri Jun 14, 2019 8:44 pm

edealinfo wrote:
aarbee wrote:
[

Since you are defending edealinfo's post, that's where all the "crap" started.

-R


To translate what Arbee openly admitted. If a person holds a differing view, not only will that person be targeted but those not also taking a diametrically opposite position will also be targeted (with Arbee's hateful opinions).

Holy Kow!

Care to elaborate :
  • What I openly admitted?
  • Where did I say that it is not acceptable for person to hold a differing view
  • I targeted somebody because of differing opinion
  • Provided any hateful opinion

These are the traits I have observed in Jet/Political camp.

Nice try.

P.S. : It quite an amusement to see someone throw a fit because NGs last name have been misspelt, but consistently misspelling the leader of Indian democracy and now cannot even properly spell C O W. :roll:
Love the AIXes
 
CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Fri Jun 14, 2019 9:05 pm

aarbee wrote:
CaliguyNYC wrote:
aarbee wrote:
Which capitalist market or govt will compensate an investor? Care to point out?


If it is true, I think it's not fair. But
1) Is this the only government in Indian history which might have done it?
2) Should the current government not investigate anything? Or just do what fancies you?

More conspiracy theories just because you are devastated that the Indian electorate choose not follow your direction.

If you want to constantly bring in your utter dislike for the current govt., it's leader, the community he is from, etc. on this thread ... better look into Indian Politics Mega thread in Non-Aviation.


Aarbee - the indemnity is about coming after the new owners for potential wrong doings of NG. That is totally normal. In the US you wouldn't need the govt to indemnify you because the laws give you work arounds (to a point). Hindujas clearly feel that Indian laws do not protect them, so they are asking the govt for indemnity.

Ok. So it is about liability issue. Even so, why should the govt. do it. It will create a seriously bad precedence. Somebody will start company, loot investors, give up, brother comes in as new investor without liablity, and the circle will go on.

CaliguyNYC wrote:
Can I ask why you get so passionate if people are not happy with the way things are handled re Jet? It is just their opinion. None of us work for an airline (that we know of - not counting the intern). Maybe one or two of us have admitted to being aviation consultants. But why are all the posts so aggressive against people. If you disagree with them, either correct them or ignore them. Look there seem to be two camps here (1) Those that lament Jet's closing and who cannot understand why Indian laws / banking rules don't allow the pieces of Jet to be sold to another owner and (2) those that feel Jet should die where die doesn't mean their current investors getting nothing it is where die means all the spoils of Jet should be given away. Both sides seem to agree the NG was a bad manager and deserves to be out.

I'm in neither camp. I have being silent for the longest time and more content with getting updates in civil aviation, Indian CA, 9Ws blow up, in that order. It's absolutely fine to discuss opinions. Let the GOI check if there is some connection between long time UK residents (Hindujas and Goyals)

What I see is 2 sets of people (person) who are in your camp 1
1) Who want to promote their political agenda in Civil Aviation and using 9W issues as a tool
2) Who are extremely upset about 9Ws implosion and using anything and everything including : politics, having NO basic minimum understanding of India and unnecessarily berating India (I'm NOT at all of the opinion that it is above criticism), comparing to NK, throwing a fit because NG was off loaded, showing the maturity of a 3rd grader by continuously misspelling Indian PMs name to bring politics in here, accusing of hatred, making fun of looks of civil aviation, I know better than EXIM bank, etc. etc. (List is endles)

So just because I argue against that doesn't make me of camp 2. I don't despise NG. NG at the end of the day was instrumental in changing the face of Indian .
aviation. Too bad his ego and at the end played his hand so bad that it's impact was not only on passengers also to their loyal employees.

CaliguyNYC wrote:
So if you agree with the above, then what is there to get so emotional. I would have been happy if say Vistara would have bought Jet's BOM opperations. The banks would have made money and Vistara would have been up and running with a nice hub. But yet I am a Jet lover. On other threads people would not describe my opinion as a lover of the failed airline. In the Jet case we have the added option of just giving away a lot of the value of Jet. Most situations with other airline failures don't have this option. So in reality no one here is a Jet lover. It is really between maintain a BOM hub airline vs destroy it.


I love aviation and happy to see the progress of Indian aviation. But, as I said in the Indian aviation thread, thats where we differ. Since you are BOM centric (don't consider this as a personal attack) your thoughts, opinions and preferences are BOM/9W centric, which is completely fair. But at the same time the growth and state of Indian aviation is not just BOM/9W. The fact that:
  • There are direct flights Indore-Nagpur, Bengalaru-Udaipur.
  • Guwhati people have 2 options to travel to Jaipur and in under 5 hours.
  • Amritsar and Goa has direct connections to Doha and beyond
  • Lucknow residents can travel to Bangkok.
without going to BOM and not using 9W shows me the progressive state of Indian aviation.

Vistara can originally and efficiently grow based on their two promoters, without changing their business plan because of 9W demise.

Indian aviation can survive without BOM hub and it's former hub airline.


Thank you Aarbee I appreciate your response. My only quibble would be the 2 categories of people you put in my camp - both descriptions are very negative. Couldn't't you have taken the high road and not personally attacked people. I fit neither category. I am not extremely upset at Jet's downfall nor do I have a political agenda. So you could have added - lovers of FSC in India (unless you doubt my publicly stated motivation).

Now to your BOM point - something has been lost in your and my back and forth. For some reason you see things as mutually exclusive. Meaning to support a BOM hub is innately to be against P2P routes between tier 2/3 cities. I have been consistent in my view that all profitable non hub routes should be kept. Also all essential P2P business routes should be kept (because you need them even with losses to serve your core premium clients). Never have I said these routes are not important nor that airlines should not try to develop them. Am I super focused on them - no. But I also believe they should be connected to major cities. Like any country a Tier 3 city usually wants to be connected to the capital, the financial center and the biggest city it is connected too (say CCU for the NE). Then you do small city to small city. India hasn't even connected big cites properly to small cities forget about small to small. So for me supporting hubs does not mean not supporting smaller cities. You keep bringing connecting small cities when I talk about BOM or DEL. It is as if to even discuss BOM/DEL means there is an attack being raged on tier 2/3 cities. There is not. But as others have said, I do also believe that Tier 2 and 3 cities all over the world see the best connectivity when you have strong local airlines (and typically strong hubs). Can Indian aviation survive without strong hubs, yes absolutely. Will it be world class, super profitable and thrive, probably not (and I only say that because of what we have seen the world over - but I admit, India could buck the trend - odds say it is hard). Frame our debate as hub vs p2p. That would be so much less personal and so much more accurate to our debate.

Finally BOM/DEL drive a huge percentage of the Indian economy, tourist arrivals etc. When aviation is disrupted in those two cities, it does affect India. You may not care, but it is not some weird elitist thing to be concerned about it (and I would even add BLR to that now). So all I am saying is please don't infer things based on your own biases. Sometimes the simplest reasons for someone's views is the answer. And yes you can add to all the above that I travel back to BOM, am Skyteam and tend to fly business so Jet affects me more than some. Nothing crazy sinister here.
 
aarbee
Posts: 406
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Re: Jet Airways: Shutdown

Fri Jun 14, 2019 9:33 pm

aarbee wrote:
Vistara can originally and efficiently grow based on their two promoters, without changing their business plan because of 9W demise.

That should be organically : "Vistara can organically and efficiently "
Love the AIXes
 
edealinfo
Posts: 1491
Joined: Mon Jan 21, 2019 7:11 pm

Re: Jet Airways: Shutdown

Fri Jun 14, 2019 10:49 pm

aarbee wrote:
aarbee wrote:
Vistara can originally and efficiently grow based on their two promoters, without changing their business plan because of 9W demise.

That should be organically : "Vistara can organically and efficiently "

What does “organically” grow even mean? Some MBA buzzword?
 
edealinfo
Posts: 1491
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Re: Jet Airways: Shutdown

Sat Jun 15, 2019 1:43 am

Further confirmation that Jet is dead, dead, dead:

Aviation Minister states India is "not a nanny state"......

https://www.thehindu.com/business/Indus ... 944557.ece
 
edealinfo
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Re: Jet Airways: Shutdown

Sat Jun 15, 2019 2:34 am

Airports STILL most impacted by Jet's downfall:

Bhuj -- Minus 85 percent
Rajkot -- Minus 50 percent
Aurangabad --Minus 42 percent.

In the cases above the connectivity previously was to Mumbai.

Other impacted airports:
Gaya, Jodhpur, Aurangabad, Khujrahao, and Mangalore (approx Minus 40% each)

https://www.cnbctv18.com/aviation/these ... 676981.htm
 
airboss787
Posts: 59
Joined: Mon Apr 29, 2019 11:39 pm

Re: Jet Airways: Shutdown

Sat Jun 15, 2019 3:06 am

edealinfo wrote:
aarbee wrote:
aarbee wrote:
Vistara can originally and efficiently grow based on their two promoters, without changing their business plan because of 9W demise.

That should be organically : "Vistara can organically and efficiently "

What does “organically” grow even mean? Some MBA buzzword?


No MBA, it's a pretty common business term. Organically just means that they should grow internally. Not by acquiring someone or taking someone over. Its growth that is natural and 'on their own'.
Star Alliance Gold
 
avier
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Re: Jet Airways: Shutdown

Sat Jun 15, 2019 7:15 am

Image
ET Now.
 
DLPMMM
Posts: 2261
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Re: Jet Airways: Shutdown

Sat Jun 15, 2019 1:46 pm

avier wrote:
Image
ET Now.


And there we are....Jet will be liquidated and no sale is possible for the precise reasons given by myself and others.

There is no way to resurrect Jet with such an unsecured creditor debt load.

Now we can sit back and listen to the three blind mice make up new fanciful financial structures and business and political soap opera plots.
 
edealinfo
Posts: 1491
Joined: Mon Jan 21, 2019 7:11 pm

Re: Jet Airways: Shutdown

Sat Jun 15, 2019 2:16 pm

avier wrote:
Image
ET Now.



Respect for the Prime Minister and the new Aviation Minister. They did not buckle under pressure [public, employees, lenders, etc] and are letting things follow the natural course.

The next logical thing for them to do is to state that for Jet's routes NOT ALREADY ALLOCATED SO FAR (roughly 1/3 of Jet's slots are yet to be allocated), and going forward, slot allocation will strictly be based on IATA standards (and not some BS committee recommendations, which can be subject political and business influence)
 
CaliguyNYC
Posts: 1070
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Re: Jet Airways: Shutdown

Sat Jun 15, 2019 5:04 pm

DLPMMM wrote:
avier wrote:
Image
ET Now.


And there we are....Jet will be liquidated and no sale is possible for the precise reasons given by myself and others.

There is no way to resurrect Jet with such an unsecured creditor debt load.

Now we can sit back and listen to the three blind mice make up new fanciful financial structures and business and political soap opera plots.


I think everyone on this board has been in agreement that Jet cannot be resurrected without renegotiating all debt. Until recently we haven’t had a clear understanding of how much the different debt is. Also this is probably the first report I have seen that says operating creditors won’t negotiate. The criticism towards the govt has been about Indian bankruptcy laws. What was the point of dragging this along if there was no way to restructure? I would have gone directly into liquidation and liquidated the whole of Jet. Isn’t that what the Tata’s wanted? While India is not the US/UK, and I am in no way saying India should be like them, under US/UK bankruptcy laws you wouldn’t have had this situation. The court would have decided how each vendor got paid and the company sold off or restructured with out a crazy debt burden. I would add that there are people in the US/UK who believe bankruptcy laws are a form of socialism to businesses and not fair to the common man. So even in the US/UK they can be controversial (although the vast majority of people support bankruptcy laws and all of our major airlines have gone in and out of bankruptcy - crazy right).
 
edealinfo
Posts: 1491
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Re: Jet Airways: Shutdown

Sat Jun 15, 2019 10:35 pm

for how long was spicejet grounded? I am not saying Jet will ever fly but am curious as to what made Spicejet a different case.
 
airboss787
Posts: 59
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Re: Jet Airways: Shutdown

Sat Jun 15, 2019 11:39 pm

edealinfo wrote:
for how long was spicejet grounded? I am not saying Jet will ever fly but am curious as to what made Spicejet a different case.


If I am not mistaken, SpiceJet was grounded only for a few hours because fuel companies refused to fuel aircraft. But things moved extremely fast and Ajay Singh came to the rescue very quickly. He was probably already in discussions with the Marans. The govt also provided some guarantee so that helped. Not knowing exactly what behind the scenes stuff happened, it was quite different. Cleaner but sparse balance sheet, less debt, less baggage, an owner who was looking to sell anyway, smaller fleet to restart, among others.
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edealinfo
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 12:42 am

airboss787 wrote:
edealinfo wrote:
for how long was spicejet grounded? I am not saying Jet will ever fly but am curious as to what made Spicejet a different case.


If I am not mistaken, SpiceJet was grounded only for a few hours because fuel companies refused to fuel aircraft. But things moved extremely fast and Ajay Singh came to the rescue very quickly. He was probably already in discussions with the Marans. The govt also provided some guarantee so that helped. Not knowing exactly what behind the scenes stuff happened, it was quite different. Cleaner but sparse balance sheet, less debt, less baggage, an owner who was looking to sell anyway, smaller fleet to restart, among others.


Aside from the politics, influence used, etc., it is interesting to me that it was grounded for a mere hours (or a few days) which is very different from Jet which is now grounded for 2 1/2 months. I guess Jet is in such a deep hole that I was foolish at times during the 2 1/2 months to actually think there were chances at it being resurrected. My biggest assumption mistake was thinking that Etihad would be more committed than it actually was. The second biggest assumption mistake was thinking the Indian Government would cave to pressure from banks, lenders, public, NG, media, and most importantly the national elections; I am actually delighted the Government stood strong. That's a positive for India although this is somewhat overshadowed by the favoritism shown to SpiceJet. If the other political party was instead running the Government, I would 100% bet it would cave [towards savings Jet].

I hope the Government now would have the kuhanas to:

1. Get rid of the 0/20 rule that stymies competition on the international routes

2. Allow Air Asia India to fly internationally

3. Get rid of the mandatory requirement to fly a certain % of its operations to Tier 2 and 3 cities/regions. Why should airlines have to incur loss or subsidize Governmental policy. If the Government needs to push travel to certain areas, UDAN is the logical mechanism.

4. Reduce taxes drastically or even to 0%) on MRO operations within India so it is cheaper for airlines to service aircraft in India rather than send it abroad. Heck, this should be a no brainer.

5. Select one city in India and make this City its "open skies" destination city. For instance, it could be Goa or the upcoming new Goa airport. This could be a demonstration project and if it turns out to be roaring success for the county (as I expect it to be), the city can add one new open-sky city every 5 years for a max of 4 open sky designated cities over a period of 20 years.

6. Set up rules for adequate competition at airports and in the country. E.g., No carrier can hold more than 20% of slots at any airport and no airline can control more than 40% of seat capacity nationwide [The % are just examples; the point is the concept].
 
edealinfo
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 12:56 am

Dr. Tulsi Jayakumar, Program Head, S.P. Jain Institute of Management & Research, Mumbai has done a pyscho analysis of NG's downfall.

Interesting tidbit: Delta at one point offered to pay Rs 300 per share but NG wanted Rs 400.

https://www.entrepreneur.com/article/335327
 
sibibom
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 5:27 am

The most important thing that saved SpiceJet (besides the correct political affiliation of the new owner) was the Marans getting out before it was too late. Jet could and would have been saved had this been done late last year. NG prevented this, now its honestly gone too far to be saved.
 
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unrave
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 5:46 am

sibibom wrote:
The most important thing that saved SpiceJet (besides the correct political affiliation of the new owner) was the Marans getting out before it was too late. Jet could and would have been saved had this been done late last year. NG prevented this, now its honestly gone too far to be saved.

Also the fact that SG had not defaulted on bank debt
Denial of racism is as egregious as racism itself
 
Andy33
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 5:54 am

CaliguyNYC wrote:
I would have gone directly into liquidation and liquidated the whole of Jet. Isn’t that what the Tata’s wanted? While India is not the US/UK, and I am in no way saying India should be like them, under US/UK bankruptcy laws you wouldn’t have had this situation. The court would have decided how each vendor got paid and the company sold off or restructured with out a crazy debt burden. I would add that there are people in the US/UK who believe bankruptcy laws are a form of socialism to businesses and not fair to the common man. So even in the US/UK they can be controversial (although the vast majority of people support bankruptcy laws and all of our major airlines have gone in and out of bankruptcy - crazy right).


But the US and UK bankruptcy laws are very different, and their effects on airlines are very different. There are no UK airlines that have gone bankrupt and then emerged back into profitability having shed debt and unfavourable contracts. The UK has nothing equivalent to Chapter 11 in the USA. If a business is bankrupt, it may end up being simply closed down and whatever cash is available distributed amongst the creditors, or broken up and sold in pieces, or sold as an entirety (maybe for a token sum, debts included) - famously DanAir was sold to British Airways for £1, but BA then took on its liabilities. In that example, the shareholders lost everything, the creditors got paid by BA..
 
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unrave
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 8:44 am

Civil Av minister reiterating that the govt will not bail out Jet Airways
https://www.thehindu.com/business/Indus ... 944557.ece

I completely agree with the stance.
Denial of racism is as egregious as racism itself
 
edealinfo
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 11:33 am

unrave wrote:
Civil Av minister reiterating that the govt will not bail out Jet Airways
https://www.thehindu.com/business/Indus ... 944557.ece

I completely agree with the stance.

So what's the next course of action? Will the Government continue the charade of meeting with Jet employees and providing a false sense of hope? When will they banks take Jet to NCLAT so it can be formally liquidated?
 
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unrave
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 11:57 am

edealinfo wrote:
unrave wrote:
Civil Av minister reiterating that the govt will not bail out Jet Airways
https://www.thehindu.com/business/Indus ... 944557.ece

I completely agree with the stance.

So what's the next course of action? Will the Government continue the charade of meeting with Jet employees and providing a false sense of hope? When will they banks take Jet to NCLAT so it can be formally liquidated?

Have you been following the news? If you have you should know that NCLT (NCLAT is the appellate tribual) will decide on admitting Jet Airways under the IBC on 20JUN. Anyways it is for the banks to decide what to do with their NPA account, not the GoI
Denial of racism is as egregious as racism itself
 
edealinfo
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 12:17 pm

unrave wrote:
Anyways it is for the banks to decide what to do with their NPA account, not the GoI


That's theory, not in practice. Did you not read that the banks had to go to the Govt to discuss the potential haircut on loans to Jet? Banks don't work in isolation. Big decisions are always made by the Government. Have you not seen a puppet show? Notice that the puppets are controlled by others. That's how things work. How do you think SpiceJet got to be so successful? With Jet going belly up and concerns about continued lending to the aviation sector, how do you think they are getting working capital loans to acquire 40 of Jet's plans virtually overnight (i.e., in 50 days which is relatively overnight in airline fleet acquisition terms). Spicejet's capacity will go up by 80% this year. Don't you think that is highly unusual?

With all due respect unrave, you think India operates from an idealized standpoint. All of us on this forum wish that is the case. The new Government has indeed substantially cleaned up much of the system compared it what it was previously under other political parties........however, favoritism still exists.
 
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unrave
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Re: Jet Airways: Shutdown

Sun Jun 16, 2019 12:55 pm

edealinfo wrote:
unrave wrote:
Anyways it is for the banks to decide what to do with their NPA account, not the GoI


That's theory, not in practice. Did you not read that the banks had to go to the Govt to discuss the potential haircut on loans to Jet? Banks don't work in isolation. Big decisions are always made by the Government. Have you not seen a puppet show? Notice that the puppets are controlled by others. That's how things work. How do you think SpiceJet got to be so successful? With Jet going belly up and concerns about continued lending to the aviation sector, how do you think they are getting working capital loans to acquire 40 of Jet's plans virtually overnight (i.e., in 50 days which is relatively overnight in airline fleet acquisition terms). Spicejet's capacity will go up by 80% this year. Don't you think that is highly unusual?


Firstly, airlines need very little working capital. Think about it - they get paid much in advance but they themselves pay their bills on credit. SpiceJet's working capital requirements are unlikely to have go up significantly. Secondly, SpiceJet is owned by a man who is close the ruling party, so there will always be a cloud of suspicion around decisions taken by the Ministry, especially if it ends up favouring SpiceJet. But in the government's defence, they have been very clear in redistribution of slots - bring new planes and get the slots, and SpiceJet has simply taken the gamble of adding a lot of planes. You have commended them for it yourselves in the past. SG's capacity shooting up is highly unsual indeed, but these are unusual times. You could argue that IndiGo has been a big benefactor of Jet's troubles too. Thanks to Jet IndiGo now controls nearly half of the domestic market.

however, favoritism still exists.

Absolutely. But having followed both Kingfisher and Jet Airways meltdowns very closely, I have to say that the banks and the GoI have handled the Jet Airways crisis much much better.
Denial of racism is as egregious as racism itself
 
blrsea
Posts: 1909
Joined: Fri May 20, 2005 2:22 am

Re: Jet Airways: Shutdown

Sun Jun 16, 2019 2:36 pm

sibibom wrote:
The most important thing that saved SpiceJet (besides the correct political affiliation of the new owner) was the Marans getting out before it was too late. Jet could and would have been saved had this been done late last year. NG prevented this, now its honestly gone too far to be saved.


True that. If Marans had hanged on till the end like NG, spicejet would have gone under too. And the turnaround wasn't easy. It took them almost 3-4 years to steer the company towards a palatable bottom line. Plus what unrave mentioned about the bank debt.

Fact is NG played poker without anything worthwhile in his hand, and all other players including EY, lenders, govt called his bluff. But by that time the company was beyond redemption.

Govt will meet with anyone and everyone who wants to turn around 9W, or employees, and give them a patient hearing and will tell them law will take its course.
 
edealinfo
Posts: 1491
Joined: Mon Jan 21, 2019 7:11 pm

Re: Jet Airways: Shutdown

Sun Jun 16, 2019 5:13 pm

unrave wrote:
[

1. Firstly, airlines need very little working capital. Think about it - they get paid much in advance but they themselves pay their bills on credit. SpiceJet's working capital requirements are unlikely to have go up significantly.

2. Secondly, SpiceJet is owned by a man who is close the ruling party, so there will always be a cloud of suspicion around decisions taken by the Ministry, especially if it ends up favouring SpiceJet. But in the government's defence, they have been very clear in redistribution of slots - bring new planes and get the slots, and SpiceJet has simply taken the gamble of adding a lot of planes. You have commended them for it yourselves in the past. SG's capacity shooting up is highly unsual indeed, but these are unusual times. You could argue that IndiGo has been a big benefactor of Jet's troubles too. Thanks to Jet IndiGo now controls nearly half of the domestic market.

however, favoritism still exists.

3. Absolutely. But having followed both Kingfisher and Jet Airways meltdowns very closely, I have to say that the banks and the GoI have handled the Jet Airways crisis much much better.


1. Thanks for the explanation. Accepted.

2. Yes, I give full credit to Spicejet for exploiting the opportunity. I am not blaming them but rather the government for creating the rules that unduly favored SpiceJet over all the other carriers. If the Government now says henceforth all new allotments will be made on IATA rules, then I am prepared to overlook the , hopefully temporary, rule they put in place that favored SpiceJet.

3. I agree about 80% in that the banks shouldn't throw good money after bad. The 20% I don't agree is for the multiple investigations launched only when it was clear that Jet was in deep trouble and I strongly suspect it was to discourage potential buyers. Maybe the government was using this as cover to justify the banks not participating in a revival but they didn't really need to as Jet did not have a business case for revival anyway. Also, I think the investigations related to "sources of funding - 25 years ago" and "possible foreign exchange violations relating to Etihad's investment in Jet's Privilege" are highly suspect for the Government's motives.

4. I give full credit to the Govt for not yielding to public, staff, etc. pressure to revive Jet. Truly remarkable for India..... and this is signs of substantial progress in fixing the system.

5. If the bankruptcy administrator get cracking, manages the sale process fast, and shuts Jet permanently down in 6 months that will be another truly remarkable development. I think the Government should invest resources in managing this timeline because for a high profile company like Jet, a successful and speedy close-out will only bring further feathers to the cap of the Government
 
edealinfo
Posts: 1491
Joined: Mon Jan 21, 2019 7:11 pm

Re: Jet Airways: Shutdown

Sun Jun 16, 2019 5:20 pm

blrsea wrote:
Govt will meet with anyone and everyone who wants to turn around 9W, or employees, and give them a patient hearing and will tell them law will take its course.


Unfortunately, "law will take its own course" is the least trusted aspect of the system in India.

>>Govt will meet with anyone and everyone who wants to turn around 9W, or employees, and give them a patient hearing

For heaven's sake, why the charade? The government had already decided Jet couldn't be saved and made sure, by its actions, that it isn't coming back. Prolonging the misery by entertaining meetings with employees, potential investors, etc. is unnecessary. Close this out!
 
edealinfo
Posts: 1491
Joined: Mon Jan 21, 2019 7:11 pm

Re: Jet Airways: Shutdown

Sun Jun 16, 2019 5:30 pm

"Among the lenders, only HDFC was smart enough to place the airline’s Mumbai office on the block – at a reserve price of Rs 245 crore."

https://www.freepressjournal.in/analysi ... orne-again
 
vadodara
Posts: 919
Joined: Mon Feb 20, 2017 7:45 pm

Re: Jet Airways: Shutdown

Sun Jun 16, 2019 10:28 pm

blrsea wrote:
sibibom wrote:
The most important thing that saved SpiceJet (besides the correct political affiliation of the new owner) was the Marans getting out before it was too late. Jet could and would have been saved had this been done late last year. NG prevented this, now its honestly gone too far to be saved.


True that. If Marans had hanged on till the end like NG, spicejet would have gone under too. And the turnaround wasn't easy. It took them almost 3-4 years to steer the company towards a palatable bottom line. Plus what unrave mentioned about the bank debt.

Fact is NG played poker without anything worthwhile in his hand, and all other players including EY, lenders, govt called his bluff. But by that time the company was beyond redemption.

Govt will meet with anyone and everyone who wants to turn around 9W, or employees, and give them a patient hearing and will tell them law will take its course.


In addition Spice Jet operates in a segment that was red hot.

NG instead played Poker with a bad hand. The 10 777’s he owned were actually a boondoggle. They would only have been valuable to DL but he blew that chance.
 
edealinfo
Posts: 1491
Joined: Mon Jan 21, 2019 7:11 pm

Re: Jet Airways: Shutdown

Sun Jun 16, 2019 10:59 pm

vadodara wrote:
NG instead played Poker with a bad hand.


I actually think he had a really good hand but didn't expect the googly (cricket terminology; don't know what the equivalent is for poker)

In my opinion, NG thought that there was not a chance in the world that a Government, on the precipice of national re-elections, would allow a high profile company with 22K staff to fall. In fairness to NG, and others who play such high profile political games, the timing of the crisis was perfect [that ordinarily would have worked in their favor as the political parties tend to buckle and give in]
 
CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 1:41 am

edealinfo wrote:
vadodara wrote:
NG instead played Poker with a bad hand.


I actually think he had a really good hand but didn't expect the googly (cricket terminology; don't know what the equivalent is for poker)

In my opinion, NG thought that there was not a chance in the world that a Government, on the precipice of national re-elections, would allow a high profile company with 22K staff to fall. In fairness to NG, and others who play such high profile political games, the timing of the crisis was perfect [that ordinarily would have worked in their favor as the political parties tend to buckle and give in]


I dont think NG was counting on the GOI. I think he was blackmailing EY and his “source” of funds. Where the money comes from has always been unclear. Net net he didn’t behave like someone who had his own money at risk.
 
UKFLYER26
Posts: 41
Joined: Tue May 28, 2019 3:14 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 5:43 am

Right let’s try this again seen as my earlier post appears to have been removed after several hours without explanation - mods?

MSN 23663 ex VT-JGE will be on display at Paris Airshow following completion of Cargo Conversion and repaint.

https://twitter.com/boeingairplanes/sta ... 64544?s=21
 
avier
Posts: 868
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 9:45 am

Image
ET Now
 
hohd
Posts: 755
Joined: Sat May 17, 2008 1:03 am

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 1:23 pm

Andy33 wrote:
CaliguyNYC wrote:
I would have gone directly into liquidation and liquidated the whole of Jet. Isn’t that what the Tata’s wanted? While India is not the US/UK, and I am in no way saying India should be like them, under US/UK bankruptcy laws you wouldn’t have had this situation. The court would have decided how each vendor got paid and the company sold off or restructured with out a crazy debt burden. I would add that there are people in the US/UK who believe bankruptcy laws are a form of socialism to businesses and not fair to the common man. So even in the US/UK they can be controversial (although the vast majority of people support bankruptcy laws and all of our major airlines have gone in and out of bankruptcy - crazy right).


But the US and UK bankruptcy laws are very different, and their effects on airlines are very different. There are no UK airlines that have gone bankrupt and then emerged back into profitability having shed debt and unfavourable contracts. The UK has nothing equivalent to Chapter 11 in the USA. If a business is bankrupt, it may end up being simply closed down and whatever cash is available distributed amongst the creditors, or broken up and sold in pieces, or sold as an entirety (maybe for a token sum, debts included) - famously DanAir was sold to British Airways for £1, but BA then took on its liabilities. In that example, the shareholders lost everything, the creditors got paid by BA..



The fact that India does not have an equivalent form of bankruptcy laws is a loss to the Indian taxpayer as nationalized banks (in most instances) have to write off the losses. While US style bankruptcy laws are too favorable to the companies declaring bankruptcy, the UK style may be more suitable or somewhat closer to it.

Prior to stopping service, Jet had some value - slots, real estate, experienced employees and some aircraft. If a bankruptcy administrator had managed these effectively, Jet's lenders/investors - banks etc. would have some return on the investment. But now there is no value in Jet, which is completely dead and the slot distribution at BOM/DEL was chaotic and there are accusations of favoritism.
 
CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 1:35 pm

hohd wrote:
Andy33 wrote:
CaliguyNYC wrote:
I would have gone directly into liquidation and liquidated the whole of Jet. Isn’t that what the Tata’s wanted? While India is not the US/UK, and I am in no way saying India should be like them, under US/UK bankruptcy laws you wouldn’t have had this situation. The court would have decided how each vendor got paid and the company sold off or restructured with out a crazy debt burden. I would add that there are people in the US/UK who believe bankruptcy laws are a form of socialism to businesses and not fair to the common man. So even in the US/UK they can be controversial (although the vast majority of people support bankruptcy laws and all of our major airlines have gone in and out of bankruptcy - crazy right).


But the US and UK bankruptcy laws are very different, and their effects on airlines are very different. There are no UK airlines that have gone bankrupt and then emerged back into profitability having shed debt and unfavourable contracts. The UK has nothing equivalent to Chapter 11 in the USA. If a business is bankrupt, it may end up being simply closed down and whatever cash is available distributed amongst the creditors, or broken up and sold in pieces, or sold as an entirety (maybe for a token sum, debts included) - famously DanAir was sold to British Airways for £1, but BA then took on its liabilities. In that example, the shareholders lost everything, the creditors got paid by BA..



The fact that India does not have an equivalent form of bankruptcy laws is a loss to the Indian taxpayer as nationalized banks (in most instances) have to write off the losses. While US style bankruptcy laws are too favorable to the companies declaring bankruptcy, the UK style may be more suitable or somewhat closer to it.

Prior to stopping service, Jet had some value - slots, real estate, experienced employees and some aircraft. If a bankruptcy administrator had managed these effectively, Jet's lenders/investors - banks etc. would have some return on the investment. But now there is no value in Jet, which is completely dead and the slot distribution at BOM/DEL was chaotic and there are accusations of favoritism.


Very well said. What compounds the loss is that the banks are GOI owned. So it really is the tax payers who suffered because there was no way to have a bankruptcy court quickly sell Jet off. I guess in India it is just too difficult given optics. Look at this forum on how many posters viewed a quick sale of Jet clean of most loans as a bailout (even if the current shareholders got nothing, just the banks). It was as if, Jet failed so it must disappear and go to zero value. I don't quite understand it. Even selling Jet to Spice/Vistara for $500M would have been better (with no debt) because at least all the built up infrastructure would not be lost. Spice never jockeyed to buy Jet under any terms, which makes me believe they didn't think they could win a govt auction of a clean Jet. But again I will say many think US bankruptcy laws are just a form of socialism for corporates so the debate is there even in the US.
 
avier
Posts: 868
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 3:09 pm

Finally Finished , RIP.

Image
https://m.economictimes.com/industry/transportation/airlines-/-aviation/sbi-led-consortium-to-take-jet-airways-to-nclt-seek-resolution-under-ibc-reports/articleshow/69825957.cms

Well summarised by a well know former aviation exec about the drama the banks staged over the last few months of trying for sincere hopes of revival :
“It’s all over for Jet Airways now! Why did it take so long for banks to take the company to NCLT? Banks have been totally bureaucratic in their approach, there was no firm process to revive the airline,” said Jitendra Bhargava, aviation expert. “This effort was only to create documentation that they made sincere efforts, but their efforts was anything but sincere.”
 
CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 7:01 pm

avier wrote:
Finally Finished , RIP.

Image
https://m.economictimes.com/industry/transportation/airlines-/-aviation/sbi-led-consortium-to-take-jet-airways-to-nclt-seek-resolution-under-ibc-reports/articleshow/69825957.cms

Well summarised by a well know former aviation exec about the drama the banks staged over the last few months of trying for sincere hopes of revival :
“It’s all over for Jet Airways now! Why did it take so long for banks to take the company to NCLT? Banks have been totally bureaucratic in their approach, there was no firm process to revive the airline,” said Jitendra Bhargava, aviation expert. “This effort was only to create documentation that they made sincere efforts, but their efforts was anything but sincere.”


So now I am totally confused - great that it is going to bankruptcy court. I found these quotes interesting:

"Lenders are also hoping that the bankruptcy courts can decide on pricing and open offer exemptions sought by Etihad, sources said." - this was essentially relief from vendor debt
"Bankers are hoping that new bidders could be attracted under the bankruptcy process to join Hinduja’s and Etihad as bidders can avoid open offers for cases under this process."

So does this mean now a new buyer can come in and essentially buy a debt free Jet - it wouldn't be Jet in the sense that all old equity holder would not own any shares in the new airline. What ever the price paid would just be distributed to debtors and then equity per the priority. Once the money is done, the rest get zero. Is this all correct?

So essentially Vistara could now do what they wanted to do in the beginning - buy up say Jet's BOM operations and not take any debt with it? Is this correct?

Either way, it looks like the saga will continue.
 
DLPMMM
Posts: 2261
Joined: Wed Apr 20, 2005 12:34 am

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 8:04 pm

CaliguyNYC wrote:
avier wrote:
Finally Finished , RIP.

Image
https://m.economictimes.com/industry/transportation/airlines-/-aviation/sbi-led-consortium-to-take-jet-airways-to-nclt-seek-resolution-under-ibc-reports/articleshow/69825957.cms

Well summarised by a well know former aviation exec about the drama the banks staged over the last few months of trying for sincere hopes of revival :
“It’s all over for Jet Airways now! Why did it take so long for banks to take the company to NCLT? Banks have been totally bureaucratic in their approach, there was no firm process to revive the airline,” said Jitendra Bhargava, aviation expert. “This effort was only to create documentation that they made sincere efforts, but their efforts was anything but sincere.”


So now I am totally confused - great that it is going to bankruptcy court. I found these quotes interesting:

"Lenders are also hoping that the bankruptcy courts can decide on pricing and open offer exemptions sought by Etihad, sources said." - this was essentially relief from vendor debt
"Bankers are hoping that new bidders could be attracted under the bankruptcy process to join Hinduja’s and Etihad as bidders can avoid open offers for cases under this process."

So does this mean now a new buyer can come in and essentially buy a debt free Jet - it wouldn't be Jet in the sense that all old equity holder would not own any shares in the new airline. What ever the price paid would just be distributed to debtors and then equity per the priority. Once the money is done, the rest get zero. Is this all correct?

So essentially Vistara could now do what they wanted to do in the beginning - buy up say Jet's BOM operations and not take any debt with it? Is this correct?

Either way, it looks like the saga will continue.


Equity holders will get nothing. Usually the order of disbursements from receipts is 1. Government Tax Debt. 2 Secured debt holders, 3. Unsecured Debt Holders (Trade debt). 4. Equity Holders.

Please note that the employees’ unpaid wages would be somewhere between 1 and 3, but so am not sure exactly where under Indian Bankruptcy Law.

There will be nothing left for any current equity holders.

The infrastructure is essentially non-existent at this point, so there is no sense in buying the carcass of Jet as it sits (rotting).

The intangibles are worthless now, and in fact probably more like liabilities than assets.
 
vadodara
Posts: 919
Joined: Mon Feb 20, 2017 7:45 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 9:56 pm

CaliguyNYC wrote:
avier wrote:
Finally Finished , RIP.

Image
https://m.economictimes.com/industry/transportation/airlines-/-aviation/sbi-led-consortium-to-take-jet-airways-to-nclt-seek-resolution-under-ibc-reports/articleshow/69825957.cms

Well summarised by a well know former aviation exec about the drama the banks staged over the last few months of trying for sincere hopes of revival :
“It’s all over for Jet Airways now! Why did it take so long for banks to take the company to NCLT? Banks have been totally bureaucratic in their approach, there was no firm process to revive the airline,” said Jitendra Bhargava, aviation expert. “This effort was only to create documentation that they made sincere efforts, but their efforts was anything but sincere.”


So now I am totally confused - great that it is going to bankruptcy court. I found these quotes interesting:

"Lenders are also hoping that the bankruptcy courts can decide on pricing and open offer exemptions sought by Etihad, sources said." - this was essentially relief from vendor debt
"Bankers are hoping that new bidders could be attracted under the bankruptcy process to join Hinduja’s and Etihad as bidders can avoid open offers for cases under this process."

So does this mean now a new buyer can come in and essentially buy a debt free Jet - it wouldn't be Jet in the sense that all old equity holder would not own any shares in the new airline. What ever the price paid would just be distributed to debtors and then equity per the priority. Once the money is done, the rest get zero. Is this all correct?

So essentially Vistara could now do what they wanted to do in the beginning - buy up say Jet's BOM operations and not take any debt with it? Is this correct?

Either way, it looks like the saga will continue.

Vistara would have still preferred to buy Jet; now they will have to get into a shoot out with IndiGo and Spice Jet.

I suspect they make a play to buy Go Air but there is no love lost between the Tata’s and Wadias.

GoAir is also A320 so Would integrate within their model rather seamlessly (yes yes the classes are different and so are the engines on NEO’s)
 
vadodara
Posts: 919
Joined: Mon Feb 20, 2017 7:45 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 9:58 pm

edealinfo wrote:
vadodara wrote:
NG instead played Poker with a bad hand.


I actually think he had a really good hand but didn't expect the googly (cricket terminology; don't know what the equivalent is for poker)

In my opinion, NG thought that there was not a chance in the world that a Government, on the precipice of national re-elections, would allow a high profile company with 22K staff to fall. In fairness to NG, and others who play such high profile political games, the timing of the crisis was perfect [that ordinarily would have worked in their favor as the political parties tend to buckle and give in]


If anything NG was counting on some corrupt politicians to be back in saddle; his dreams blew up in smoke.
 
CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 10:00 pm

DLPMMM - on the assets being left that is where the confusion comes. The article made it seem like they could essentially liquidate Jet with out the debt obligations (where they say what EY wanted - this was also what Vistara wanted). Is that a possibility? Remember the BOM slots have not officially been given away. Someone could rehire the Jet employees, assume what ever vendor agreements they want (catering, cleaning etc). Plus the engineering, luggage handling etc etc infrastructure must still all be there. So when people say nothing, is it really nothing? If I was Vistara, I just want their BOM slots plus the BOM infrastructure. As someone pointed out, Vistara doesn't have catering for long haul, all the baggage handling etc. You could get all of that in liquidation. Now employees need to sign up to the new airline. Given they would need only a fraction of their old staff, I would think many would come back.
 
CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 10:09 pm

Vadodora - I agree on the players except I think Go Air is out (they want to exit not buy). I think it is EY (plus local partner), Vistara and Spice that are in the running. If the GOI is really serious and will allow a clean Jet to be sold (keeping most of the BOM slots and most intl route authority), I think it will be a good auction. Now again it all comes down to what is being sold. I am absolutely listening to those who say there is no value to Jet. I just get confused by articles like the one posted that make it seem that liquidation in Indian bankruptcy actually does give a clean debt free business at the end. Perhaps EY didn't want this route because now Jet is open to bidding by all whereas up until now a new buyer had to deal with EY. Who knows I get really confused by this process. Let's see what happens.
 
DLPMMM
Posts: 2261
Joined: Wed Apr 20, 2005 12:34 am

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 11:15 pm

CaliguyNYC wrote:
DLPMMM - on the assets being left that is where the confusion comes. The article made it seem like they could essentially liquidate Jet with out the debt obligations (where they say what EY wanted - this was also what Vistara wanted). Is that a possibility? Remember the BOM slots have not officially been given away. Someone could rehire the Jet employees, assume what ever vendor agreements they want (catering, cleaning etc). Plus the engineering, luggage handling etc etc infrastructure must still all be there. So when people say nothing, is it really nothing? If I was Vistara, I just want their BOM slots plus the BOM infrastructure. As someone pointed out, Vistara doesn't have catering for long haul, all the baggage handling etc. You could get all of that in liquidation. Now employees need to sign up to the new airline. Given they would need only a fraction of their old staff, I would think many would come back.


In liquidating Jet, the intangible asset like supplier contracts, employee contracts and the non fungible slots are lost since the corporation entity is dissolved in order to get rid of the residual secured plus the unsecured debt. Basically, all that can be acquired in this case are aircraft from the lessors/lien holders and the ground handling equipment and office furniture. The corporation is dissolved and all contracts terminated.

If they want to buy the slots and contracts, they have to agree to buy the corporation before it is dissolved, which means they have to agree to take on both the secured and unsecured debt as well as have the agreement of the current equity holders.

The unsecured debt load was why I said there was no way to resurrect Jet as agreement from the unsecured and secured debt holders is pretty much impossible given the financial reports from the last 8 months.

That is why I have been saying that Jet was already dead and fanciful schemes are not possible.
 
CaliguyNYC
Posts: 1070
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 11:20 pm

DLPMMM wrote:
CaliguyNYC wrote:
DLPMMM - on the assets being left that is where the confusion comes. The article made it seem like they could essentially liquidate Jet with out the debt obligations (where they say what EY wanted - this was also what Vistara wanted). Is that a possibility? Remember the BOM slots have not officially been given away. Someone could rehire the Jet employees, assume what ever vendor agreements they want (catering, cleaning etc). Plus the engineering, luggage handling etc etc infrastructure must still all be there. So when people say nothing, is it really nothing? If I was Vistara, I just want their BOM slots plus the BOM infrastructure. As someone pointed out, Vistara doesn't have catering for long haul, all the baggage handling etc. You could get all of that in liquidation. Now employees need to sign up to the new airline. Given they would need only a fraction of their old staff, I would think many would come back.


In liquidating Jet, the intangible asset like supplier contracts, employee contracts and the non fungible slots are lost since the corporation entity is dissolved in order to get rid of the residual secured plus the unsecured debt. Basically, all that can be acquired in this case are aircraft from the lessors/lien holders and the ground handling equipment and office furniture. The corporation is dissolved and all contracts terminated.

If they want to buy the slots and contracts, they have to agree to buy the corporation before it is dissolved, which means they have to agree to take on both the secured and unsecured debt as well as have the agreement of the current equity holders.

The unsecured debt load was why I said there was no way to resurrect Jet as agreement from the unsecured and secured debt holders is pretty much impossible given the financial reports from the last 8 months.

That is why I have been saying that Jet was already dead and fanciful schemes are not possible.


But doesn’t the court have the ability to restructure or write off vendor debt. That is what the article seem to say (but I could be wrong, and I understand Indian newspapers don’t always get things right). Again assuming the GOI really does want to get as much back on the PSU bank debt, I would think they would want to approve the vendor debt restructuring. After all even if the vendors got 10% what is owned, it is better than zero.
 
DLPMMM
Posts: 2261
Joined: Wed Apr 20, 2005 12:34 am

Re: Jet Airways: Shutdown

Mon Jun 17, 2019 11:28 pm

CaliguyNYC wrote:
DLPMMM wrote:
CaliguyNYC wrote:
DLPMMM - on the assets being left that is where the confusion comes. The article made it seem like they could essentially liquidate Jet with out the debt obligations (where they say what EY wanted - this was also what Vistara wanted). Is that a possibility? Remember the BOM slots have not officially been given away. Someone could rehire the Jet employees, assume what ever vendor agreements they want (catering, cleaning etc). Plus the engineering, luggage handling etc etc infrastructure must still all be there. So when people say nothing, is it really nothing? If I was Vistara, I just want their BOM slots plus the BOM infrastructure. As someone pointed out, Vistara doesn't have catering for long haul, all the baggage handling etc. You could get all of that in liquidation. Now employees need to sign up to the new airline. Given they would need only a fraction of their old staff, I would think many would come back.


In liquidating Jet, the intangible asset like supplier contracts, employee contracts and the non fungible slots are lost since the corporation entity is dissolved in order to get rid of the residual secured plus the unsecured debt. Basically, all that can be acquired in this case are aircraft from the lessors/lien holders and the ground handling equipment and office furniture. The corporation is dissolved and all contracts terminated.

If they want to buy the slots and contracts, they have to agree to buy the corporation before it is dissolved, which means they have to agree to take on both the secured and unsecured debt as well as have the agreement of the current equity holders.

The unsecured debt load was why I said there was no way to resurrect Jet as agreement from the unsecured and secured debt holders is pretty much impossible given the financial reports from the last 8 months.

That is why I have been saying that Jet was already dead and fanciful schemes are not possible.


But doesn’t the court have the ability to restructure or write off vendor debt. That is what the article seem to say (but I could be wrong, and I understand Indian newspapers don’t always get things right). Again assuming the GOI really does want to get as much back on the PSU bank debt, I would think they would want to approve the vendor debt restructuring. After all even if the vendors got 10% what is owned, it is better than zero.


The unsecured debt holders are owed almost as much as the banks.

The banks will get about 30% back by liquidation of the assets. Why would the want to take an 80% or more haircut?

The vendors are screwed and pissed off. They want nothing to do with Jet and will not extend them credit. The current contracts with them are only valid if they are fully paid up.

I’ve seen this lots of times before.
 
dtw2hyd
Posts: 7070
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: Shutdown

Tue Jun 18, 2019 2:07 am

edealinfo wrote:
Further confirmation that Jet is dead, dead, dead:

Aviation Minister states India is "not a nanny state"......

https://www.thehindu.com/business/Indus ... 944557.ece


No need to be a nanny, just don't be the au pair from hell in an LMN movie. That's what GoI was for Jet.
 
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unrave
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Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: Shutdown

Tue Jun 18, 2019 4:32 am

dtw2hyd wrote:
No need to be a nanny, just don't be the au pair from hell in an LMN movie. That's what GoI was for Jet.

Thank you GoI for not trying to keep a zombie airline alive.
Denial of racism is as egregious as racism itself
 
VTCIE
Posts: 301
Joined: Wed Oct 10, 2018 11:10 am

Re: Jet Airways: Shutdown

Tue Jun 18, 2019 5:34 am

Now that 9W is finished for good, what happens to the great majority of its employees who have not found any sort of employment elsewhere? Will they be forced to continue the job hunt? Have the other airlines absorbed 9W employees to capacity?
In grieving remembrance of the thousands of people who lost their lives on ET-AVJ, PK-LQP, XA-UHZ, S2-AGU, CP-2933, SU-GCC, EI-ETJ, D-AIPX, PK-AXC, 9M-MRD, VT-AXV and above all 9M-MRO, besides many more. Your deaths are not in vain. Safety first, always.
 
binayak
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Re: Jet Airways: Shutdown

Tue Jun 18, 2019 5:50 am

VTCIE wrote:
Now that 9W is finished for good, what happens to the great majority of its employees who have not found any sort of employment elsewhere? Will they be forced to continue the job hunt? Have the other airlines absorbed 9W employees to capacity?


Most of pilots and cabin crew have found employment either in aviation or other hospitality sector.
Worst affected is the engg dept as most airlines in India outsource maintenance. Their only major option is AIESL. That's why most of the unemployed ex 9W staff you find on social media are engineers. I hope they get employed soon.
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